Trucks roll in to work around northern corridor rail slowdown

Production at a Minnesota company that supplies a critical ingredient to food companies is slowing down because of the the ongoing backup in rail traffic in the northern corridor.

The Business Journal has a summary of a story that is behind the paywall at the Wall Street Journal. It said that Moorhead-based American Crystal Sugar has been forced to cut production due the the delays caused by the major bottleneck on a critical stretch of rail lines.

American Crystal supplies companies including General Mills, Kraft Foods and Nestlé. The story said American Crystal and other producers, including Black Gold Farms of Grand Forks, North Dakota, have turned to trucks to haul their shipments. Trucking is more costly than rail, especially for long-distance trips.

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Railroad delays, brought on by the oil boom in the Bakken shale oil field and complicated by wintry weather, have jammed and backed up up the system in North Dakota, including passenger traffic as well as industrial hauling. Government officials, farmers and commuters have complained that rail companies prioritize oil shipments. Railroads like BNSF promise to add more locomotives in an effort to unsnarl the system.

A report earlier this month found that Canadian grain farmers are months behind in their rail shipments of grain, which is raising costs for General Mills in production of Cheerios. The backlog is the result of record harvests, cold winter weather, shorter trains and railways’ preference for shipping oil instead of heavy grain loads.

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The Fargo Forum reports the weather slowed North Dakota oil production in January, likely delaying the much-anticipated 1 million barrel a day milestone. The state produced an average of 933,128 barrels of oil per day in January, according to preliminary numbers released Thursday by the Department of Mineral Resources. The figure is an increase of 6,441 barrels per day over December production.

Seventy-two percent of North Dakota oil production was transported by rail in January, according to the North Dakota Pipeline Authority.